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What You Need to Know About Short Term Rentals and Home Insurance

Short term rentals have become an increasingly popular option for travellers looking for alternatives to traditional hotels. As such, many home owners are taking advantage of this trend to make some additional income from their properties. Are you thinking about doing short term rentals on your property? If so, there are implications for your home insurance coverage. Let’s get into some of the details…

A change in usage means you need to inform your insurer

Regardless of whether we are talking about home insurance or auto insurance, whatever type of insurance coverage you have in place, if anything changes with your situation, you need to let your insurer know.

Don’t make the mistake of thinking that it’s no big deal if there is a slight change to your needs or the way you use your property. Even if the change is temporary, such as deciding to do a short term rental for a few weeks while you are away on holiday for example, your insurer needs to know about any changes. If something were to happen, and the new scenario you find yourself in is not covered by your current plan, you could be in some serious hot water for violating your existing home insurance coverage, and on the hook for damages if your home insurance company were to deny your claim due to misrepresentation.

So with that said, if you are doing short term rentals on your property, that reflects a change in your home insurance coverage needs and you must let your insurer know so that your plan can be adjusted. Your insurer might have specific stipulations around how STRs will work with your plan, so you need to know all the details to ensure that you have proper coverage in place.

Coverage offered by short term rental sites is not enough

Many home owners make the mistake of thinking that they do not need any additional coverage on their home insurance plan since STR rental sites such as AirBnB offer coverage to property owners that use their platform. It is important to note however that there are limitations to such coverages and you need to have a comprehensive plan in place. You cannot rely on this coverage exclusively. And often, your home insurance and STR coverages will work in tandem.

Here is some information from common STR sites regarding the coverages they have in place:

Have questions about your current home insurance coverage and STRs? Thinking about getting into the STR game and what to learn more about the house insurance you will need? Contact us today to speak with one of our insurance specialists, or click here to get a quote for home insurance online 24/7.

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This post is intended to provide general information for educational purposes only and is not meant to cover all terms, conditions and exclusions that are found in different insurance policies. If there is any inconsistency between this information and the definitions in your policy, it is your policy that governs. The specifics of any home or condo insurance plan should be discussed with your broker or insurance provider. Different companies offer different types of coverage, so it is important to stay informed and do your research and due diligence.


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